nostradamus1

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A barrel of crude oil is cheaper than bottled water in supermarkets.

In mostly all western European countries a bottle of one and half litres of water costs 0.70 Euros. In order to compare both prices you need to buy 106 bottles of water to get 159 litres, equivalent to a barrel of crude oil, so 106 x 0.7 euro = 74.20 euro
Now we have to change euro to dollar so, 74.20 euro x 1.4 = 103.88 dollars.

As you can see, you have to pay 103.88 dollars to get 159 litres of bottled water, but you only need 35 dollars to get a barrel of crude oil.

80% of the income of countries like Saudi Arabia, Iran, Kuwait, Arab Emirates, Iraq, Venezuela, and almost the rest of the oil exporters’ countries is based on the sale of this raw material.

Oil is a very scarce good and the leaders of these countries must act with caution and responsibility in order to benefit their economies because their political stability and well-being of their citizens depends on it.

The oil reserves in operative oilfields started declining years ago but the world needs and demands more and more oil year after year. In the last 20 years, we haven’t discovered any important oilfields and the new ones are very difficult and very costly to operate. Most of them are placed in far open sea and in very deep water sea. The other ones are placed in land but in abysmal depths with low capacities. Take a look at the above chart. During the 1960s, for instance, we consumed about 6 billion barrels per year while finding about 30-60 billion per year. Those consumption/discovery ratios have nearly reversed themselves in recent years. We now consume close to 30 billion barrels per year but find less than 4 billion per year. Oil markets are no longer mainly reliant upon the consumption patterns and trends in the United States, Europe, and Japan like before. The markets of the emerging countries have started to play a major and significant role which is likely to grow in the future.

$100 barrel is too cheap for something that moves the world and that is so scarce.

How long do you think that the price could remain here? 6 month? 1 year? year and half? How lower could it go? $30 pb? $25 pb? $20 pb? Less? Ok, now please tell me, do Us, Japan and Europe want to recover the crisis making cars and building houses? do they want to recover the employment? in order to revive the economy they must put money in it, then the people can get employment and buy cars and houses, it means opened factories and banks, it means money in hand, and IT MEANS OIL DAMAND, this is the true reality, Geopolitical conflicts with Iran in Persian gulf and strait of hormuz , problems in Venezuela, in Arabia Saudi, Israel- terrosit attack in oilfields,etc .etc. natural disasters in gulf of Mexico, India, China, all these MEAN OIL DAMAND, but the world must go on and on, so no matter how long it takes, we will see oil at $147 0r $200 or maybe more, who knows!

Best regards